Foxconn will move forward on factory
Company says plant will begin production in 2020
“We’re really excited that we’re going to finally see this happen.” Jonathan Delagrave Racine County executive
Foxconn Technology Group said Monday that the next phases of construction on its announced flat-screen plant in Racine County will begin by this summer.
The plant — a “Gen 6” liquid crystal display panel factory, or “fab” — will begin production in the fourth quarter of 2020, the company said.
The announcement follows talks last week between state and local officials and Louis Woo, special assistant to Foxconn founder and CEO Terry Gou.
Woo’s visit to Wisconsin came six weeks after reports that Foxconn might not locate a factory in Mount Pleasant after all — reports that prompted President Donald Trump to contact Gou, with the company on Feb. 1 subsequently renewing its earlier pledge to build a manufacturing plant.
Monday’s announcement reiterated the Feb. 1 statement, with added details on timing.
Besides saying construction will move forward in summer, Foxconn said it will award contracts by April 1 for work on utilities, roads and storm drainage at the Mount Pleasant site.
The first requests for bids for construction of the Gen 6 factory and associated buildings will be issued in May, Foxconn said. Information sessions for contractors interested in bidding will be held on April 3 and April 10, the company said. Times and locations have not been released.
Racine County Executive Jonathan
Delagrave called Monday’s news “a great announcement.”
“We’re really excited that we're going to finally see this happen,” he said.
Last week’s talks with Woo — who also met with Gov. Tony Evers — weren’t in reaction to the reports that Foxconn might back away from doing manufacturing in Wisconsin, Delagrave said.
“We’ve always been in contact with Foxconn,” he said. “…What prompted this meeting was that they finally developed what their first phase looked like, and they were ready to talk about it.”
Delagrave said he and Jenny Trick, executive director of the Racine County Economic Development Corp., had "a candid conversation" with Woo on such topics as employment and what the factory will look like. Foxconn remains committed to creating 13,000 Wisconsin jobs, with Racine County getting at least half of them plus one, Delagrave said.
Taiwan-based Foxconn announced in 2017 that it would build an enormous LCD production complex in the U.S., prompting competition among states for a project that promised to bring thousands of factory jobs and kick-start a new industry in the country. The company chose Wisconsin, which offered an unprecedented $3 billion in state tax breaks and another $1 billion from local government and utility ratepayers.
The project and the subsidies have become divisive political issues, with Trump and former Republican Gov. Scott Walker backing Foxconn, many Democrats criticizing the deal, and skeptics suggesting Foxconn will back away from its stated plans as it has elsewhere.
While crews directed by the state and an electric utility have continued to work on local roads and a power substation, much work on the Foxconn complex itself appears to have halted over the last two months.
Uncertainty over the project's future exploded in January after media outlets reported Foxconn was considering ending work in Wisconsin altogether, prompting Republican legislative leaders to blame the November election of Evers for any changes in the company's plans.
Evers on the campaign trail was sharply critical of the taxpayer-funded incentive package that Walker and Republican lawmakers approved for the Taiwanese tech giant, saying "just about anyone could’ve cut a better deal."
Assembly Speaker Robin Vos and Senate Majority Leader Scott Fitzgerald said then it wasn't surprising Foxconn would rethink its plans under Evers.
But since then, Foxconn officials have said the company's relationship with Evers is productive as the Democratic governor asks them for transparency. And on Monday, Evers took credit for their latest announcement.
"As the Foxconn project develops there will be ongoing conversations to ensure that Wisconsin taxpayers see a good return on their investment, but today’s announcement by Foxconn makes it clear that Gov. Evers is getting results," Evers' spokeswoman Melissa Baldauff said in a statement.
Baldauff said Evers would "continue to make good on his promise to protect the taxpayers by making sure that Foxconn is transparent and accountable as they move forward."
Delagrave said Monday that he has never doubted Foxconn will build a factory.
"And I’m speaking for myself and on behalf of Racine County government," he said. "We never were wavering that they were gonna have a manufacturing (plant). Now, how big, what size, what does that look like — sure that was always fluid. But Foxconn was always open and honest with us in terms of, look, we want to look at the global economy and then based on those dynamics, we’ll put in our best plan."
Skepticism about Foxconn intensified last summer, when the company stopped saying it would build the "Generation 10.5" factory specified in its state and local contracts. Such factories are much larger and more expensive than the Gen 6 plant Foxconn now says it will build, and can manufacture much larger screens. The company has cited changing global market conditions as the reason for its shift in plans.
In January, Woo told Reuters the company couldn't compete in producing large LCD panels, saying "in terms of TV, we have no place in the U.S."
Assembly Minority Leader Gordon Hintz, D-Oshkosh, suggested Monday the state should find a way out of providing Foxconn with taxpayer subsidies given the top company executive's admission. Hintz is a board member of the Wisconsin Economic Development Corp, which oversees the state's contract with Foxconn and distributes tax credits to the company.
"Why would WI be interested in giving taxpayer $ for a project that Foxconn said cannot be competitive?" Hintz said in a tweet. "It makes no sense for WI to invest in LCD industry that is cost-sensitive, & products that have short life cycles. Why build a plant for product w/ access capacity & no demand?"
Asked Monday whether he would consider it a breach of contract if Foxconn doesn't build the larger plant, Delagrave said, "Like any good partners, we're going to sit down and talk about what the Gen 6 means vs. the Gen 10.
"But we’re excited to have the Gen 6 here, and I think that’s a huge step forward. Now, whether they expand the Gen 6 or build another Gen 6 or maybe that Gen 6 turns into a Gen 10, that’s all up for discussion in terms of looking out at the next phases.
"But we do have a development agreement and it says Gen 10. I think as we move forward we’re going to have discussions in terms of how does that equate to our local development agreement, but we’re ecstatic about the Gen 6.”
Delagrave said he views Racine County as a potential trailblazer as it works to bring manufacturing back to the region and beyond.
"I just don't think that can be underscored enough, and we're proud of that," he said.